Future unclear for Tehran Derby rivals as public sale approaches

Iranian football has a new celebrity these days, but this one is not a footballer, manager or club owner.

He is Mir Ali Ashraf Abdollahpouri Hosseini, head of the Privatization Organization. The group is responsible for selling Tehran’s two big clubs, Persepolis and Esteghlal, and now fans and observers hang on Mr. Hosseini’s every word. Until now, however, the fanfare has been for naught.

Nearly a decade ago, in the last days of Mohammad Khatami’s presidency, the government decided to privatize both Esteghlal and Persepolis in line with the Iranian constitution. But the election of Mahmoud Ahmadinejad in June 2005 changed the fate of the two rival clubs.

The country’s Ministry of Youth Affairs and Sports retained control of both clubs. Ahead of the controversial 2009 presidential election, Ahmadinejad ordered the public sale of the teams’ stocks. But this sale never took place, and Ahmadinejad’s rivals accused him to exploit the popularity of the two clubs to gain votes.

It was only after another election – and Ahmadinejad’s departure – that movement could be seen again. Newly-elected president Hassan Rouhani’s fourth choice for the position, former wrestler Mahmoud Goudarzi, took over as the Minister of Youth Affairs and Sports in the fall of 2013. One of his first decisions was the appointment of another wrestler, Olympic bronze medal winner Amir Reza Khadem, as the ministry’s key man to lead privatisation efforts of Persepolis and Esteghlal.

While it appears that the ministry is serious in their quest, they already face tremendous challenges. Both clubs are in poor financial shape, and the situation continues to worsen with every season. Each holds a debt of around €30 million, a sum that will complicate any potential sale.

More than anything, those involved want to protect Persepolis and Esteghlal from the catastrophes that other privatised clubs have faced. Some, including former ministry head Mostafa Hashemitaba, believe that the clubs should disband rather than privatise due to their massive debts. The Tehranian giants would not be alone; in fact, all private clubs in Iran struggle to turn a profit. Almost all of the usual revenue sources for a football club – including broadcasting rights, ticket earnings, and uniform sales – are unavailable in Iran. Owners who take on football clubs in the Central Asian country often find themselves quickly regretting their decision.

In addition, Persepolis and Esteghlal have always been than sporting clubs for the government. Their popularity had made them a source of social power, and their potential privatisation brings security concerns. Managing Tehran Derby crowds has challenged administrators for years, and many believe that the drastic slump both have experienced in recent years is in fact intentional – a targeted process intended to reduce their popular appeal and diminish interest.

Despite all of these difficulties, the Iranian government is determined to sell both clubs. But three attempts have yielded no results; the first two receive no bids and the third resulted in just one offer for Persepolis that failed to materialise in the end. As a result, a fourth tender will be held this week.

Now, fans wait to see whether this fourth attempt will bear fruit. The sale of even one club would begin a new chapter in Iranian football, but for two of region’s most storied clubs the future remains unclear.